ANZ's UDC Finance lifts net profit by 5 per cent to $61.6m

ANZ's UDC Finance - which is in the throes of being bought by Chinese conglomerate HNA - has posted a record net profit after tax of $61.6 million for the year to September 30, 2017, up 5 per cent over the previous financial year.

A key contributor to the result was strong lending growth, up 13 per cent to $2.912 billion, UDC said.

Motor vehicle lending increased by 28 per cent, commercial lending by 4 per cent and equipment dealer lending was up 7 per cent.

"UDC has delivered another very good result, reflecting growth in our loan portfolio across a range of industries, continued improvement in credit quality and careful management of costs," said UDC chief executive Wayne Percival said.

"Continued strength of the economy has seen record new car sales, healthy investment in new equipment in agriculture, forestry, construction and business services.

"This momentum has continued, with UDC's loan book passing $3 billion at the start of November."

At $1.039b, debenture funding remains an important part of the funding mix but has declined by 35 per cent from the prior year, it said.

ANZ has increased the level of funding support with the limit on the facility increased to $2.7b, effective from November 13.

Early this year, HNA announced the planned purchase of UDC for $660 million.

The transaction, which is before the Overseas Investment Commission and the Reserve Bank, was expected to have been completed by the fourth quarter of this year.

Last week, ratings agency S&P Globals said UDC Finance's long-term debt rating would fall to "junk" status if the proposed sale to HNA went ahead.

S&P said it had kept its rating of UDC on "credit watch", with negative implications, pending the sale. S&P assessed the overall creditworthiness of the combined HNA group - at B, down from B+.